The reason I believe this is possible is simple. Some of you guys say dollar is backed by GDP, production etc. and I can see why that may seem to make sense, but the dollar itself are just numbers (not even all printed on paper, but numbers in computers) which are backed by absolutely nothing! No gold, no silver, just faith! The entire monetary system based entirely on faith.

The Euro, Pound Sterling, and Yen are also fiat currencies. What major currencies today are not fiat currencies?

Currency devaluations are relative to each other. It's difficult to blame relative devaluations on the use of fiat currencies, when both currencies are fiat currencies.

Quote:

Originally Posted by memenode

If Obama and Bush didn't print up trillions, dollar would probably be a bunch stronger today, possibly having the biggest rebound in decades! Unfortunately, they didn't.

If you look at the growth of the U.S. monetary base (attached), it is difficult not to conclude that the dollar and anyone holding dollars is headed for severe pain.

Quote:

Originally Posted by memenode

What I'd like to ask all you fellow net builders caught victim in this stupid game of theirs, especially those outside of US like me is this: What will you do if the value of US dollar goes to the same level or below your local currency? I think you all know what that means. TO me it means I can't make a living anymore unless I successfully charge people a lot more dollars (5 times what I charge now) which is probably gonna scare away my US customers and tank my business). I'm honestly curious about this, what do you plan to do?

I believe this is part of the Obama administration's plan to prevent 25% unemployment in the U.S.

6 August, 2009, 11:10 AM

SeriousBiz

2 Attachment(s)

There are too many people profiting from those changes. I myself invest in Forex.

The currency pair I work the most with is EUR/USD (as do most people).

I'm attaching some graphs to show the current dollar status over the last months.

1st: 1/1 day scale.
2nd: 1/1 hour scale.

6 August, 2009, 12:19 PM

Will.Spencer

Quote:

Originally Posted by SeriousBiz

I myself invest in Forex.

"invest in FoxEx" is such an odd phrase. :p

We may speculate in ForEx, but we can't really "invest" in it. ForEx never really creates anything.

I'm not saying it's a bad idea or a bad practice, I'm just saying it's not true "investment." :angel:

What do you think about this comment from Art Cashin:

There is speculation among brokers that a “dollar carry trade” may be evolving. For decades, arbitrageurs would borrow money in Tokyo at zero percent and short the yen. They would then take the “free money” and buy commodities, crude, high yielding bonds and even stocks. With U.S. rates held at zero for months, traders wonder if an American version of the “carry trade” is beginning to evolve.

6 August, 2009, 12:32 PM

SeriousBiz

That's right. Speculate in ForEx is way more correct.

Those Cashin's thoughts are very interesting. But those practices won't bring any good to the North American economy at all as all this does is to create fake money sources which will do nothing but to take the economy even lower in the medium and long term.

6 August, 2009, 13:13 PM

strat

So i hope it keeps dropping. Just what i need for us "Aussies"

My daily business (work) which brings me most my $$$$ before my online stuff suffered a lot when the USD to AUD fell back to low .70c

Lets hope it goes back to what it was nearly 1 yr ago. :D

6 August, 2009, 15:35 PM

memenode

Quote:

Originally Posted by Will.Spencer

The Euro, Pound Sterling, and Yen are also fiat currencies. What major currencies today are not fiat currencies?

Currency devaluations are relative to each other. It's difficult to blame relative devaluations on the use of fiat currencies, when both currencies are fiat currencies.

Of course, I'm aware of that, and frankly I am with Ron Paul and Peter Schiff (and pretty much all libertarians) who call for sound money backed by silver or gold or anything of real value. Fiat money cannot not to fail at some point. They all fail eventually and even before failing the fact they're fiat does continuous damage to the economy in forms of repeated cycles of recession and insecurity of savings held in those currencies.

They devalue relative to each other, but also relative to gold and silver which are the real anchor values. I still think inflation (as printing money) plays a major part in devaluation. Currency collapse isn't called hyperinflation for nothing. :)

And I think in recent months USD was inflated more than all other currencies and given the heights at which it was US economy stands to crash hardest and lose most. We'll see.. but I don't think USD will survive this.

Quote:

Originally Posted by Will.Spencer

If you look at the growth of the U.S. monetary base (attached), it is difficult not to conclude that the dollar and anyone holding dollars is headed for severe pain.

Yeah, unfortunately, at least in the short term. In the long term it's actually for the better because something more stable ought to replace it or maybe we get a chance to establish a true free market currency.. But the toughest thing is to get through this ugly stage to get there.

Quote:

Originally Posted by Will.Spencer

I believe this is part of the Obama administration's plan to prevent 25% unemployment in the U.S.

You mean inflating? I'm not sure how would that accomplish less unemployment. I don't think US government (or any government for that matter) can do anything, but in order to preserve perception of their legitimacy they will do something, anything.. regardless of consequences to appear that they're in control. In reality bail outs and stimulus will result in even more unemployment and a greater collapse.

The market is self correcting. All they can do is get in the way. The market actually wouldn't stand fiat currencies if it was let function. They'd be out forever.

6 August, 2009, 15:40 PM

memenode

Quote:

Originally Posted by Will.Spencer

"invest in FoxEx" is such an odd phrase. :p

We may speculate in ForEx, but we can't really "invest" in it. ForEx never really creates anything.

I'm not saying it's a bad idea or a bad practice, I'm just saying it's not true "investment." :angel:

He made a clear distinction between investing and speculating in that speculating is basically just guess work, a form of gambling, whereas investing is actually a long term game based on more fundamental values. :)

9 August, 2009, 11:06 AM

MaxKidder

I hate it when the US dollar falls as my adsense income drops, the AUS VS US dollar situation suits me just fine